For example air quality is satisfactory in only 8 out of 74 major cities, and just 25 percent of drinking water reaches national quality standards. The extent and severity of China’s environmental pollution is closely related to China’s industrial, energy and transportation structure, with heavy industries accounting for almost 30 percent of the national GDP and 67 percent
energy coming from coal.
China urgently needs to transition toward a green and sustainable growth model. This was recognised in the Third Plenum of the 18th CPC Congress which calls for the establishment of “ a systematic and full-fledged institutional system of ecological civilization for the protection of the eco-environment,” and “a market-based mechanism that channels private capital investments to the protection of the eco-environment”.
Guided by the foregoing targets and drawing on international practices and experiences, this report proposes 14 specific recommendations in four areas for establishing China’s green finance system.